“This time, we beat Big Pharma”, United States President Joe Biden tweeted, after finally giving his government the power to negotiate the price of 10 prescription drugs, including medicines used to treat diabetes, blood cancer and kidney disease.
Through these negotiations, it’s expected that millions of Americans will save a small fortune, as the price of drugs provided through the government’s national insurance programme tumble. The pharmaceutical giants are furious. For decades they have been able to charge Americans with public insurance whatever the market will bear for their products. Big Pharma, as these giants are known by their detractors, has now launched multiple legal actions to protect its monopoly power.
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By European standards, Biden’s actions are moderate. Most countries negotiate the price of drugs purchased by public health systems. While drug prices are still high across Europe, putting severe strain on overburdened health systems, they are a fraction of the price paid by Americans. What makes Biden’s action so significant is precisely that, up to now, Big Pharma has always had the upper hand in the US, using its power to extract whatever profits it likes from the American public. Despite the unpopularity of the industry, only a few brave politicians would stand up to it.
What’s changed? First, it’s difficult to overstate the impact of the so-called “opioid crisis” on American society. Hundreds of thousands of Americans have died from opioid overdoses. The real scandal is that the major contributor to this epidemic was a drug company called Purdue Pharma, which spent years pushing an opioid called OxyContin on patients. The drug is so strong and addictive that it shouldn’t be prescribed for any but the most serious, end-of-life, pain. But Purdue spent a fortune cajoling doctors into prescribing the drug for even moderate pain, pretending there was little chance of getting hooked. The levels of addiction and death that followed hollowed out whole towns, as can be seen in the recent dramatisation by Netflix, Painkiller.
So the opioid crisis has created mass hostility to the pharma industry. But there’s something deeper going on too, a realisation that these corporations, which we assume are inventing the life-saving medicines of the future, are actually seriously failing in that task.
A big wake-up moment was the COVID-19 pandemic. In the run-up to the pandemic, Big Pharma had little interest in researching pathogens that might cause a major epidemic, or indeed in researching vaccines full stop. They simply didn’t represent the sort of jackpot that, say, a new cancer drug could produce.
The research that had been done into coronaviruses was carried out with public money. Once the pandemic struck, that public funding was multiplied many times over: Big Pharma was handed billions of dollars to bring vaccines to us as fast as possible. But then, the intellectual property was privatised. Big Pharma owned vaccines created using public money, and got to decide who produced them, at what price, and who got to buy them. Corporate executives, employed to maximise their shareholder returns were in charge of who lived and who died.
The Biden administration was horrified when Moderna’s vaccine – almost entirely paid for by the public purse – was making Moderna’s CEO into a multibillionaire, while the US government seemingly had little power to get the vaccine know-how shared and produced more widely. Moderna seemed more interested in legal action to shore up its control of this technology – even going as far as refusing to recognise three government scientists as co-inventors on some of its patents.
Pfizer’s vaccine did involve some private funds but was still made with vast sums of public money. Imagine the horror of the US administration when Pfizer tried to charge the government an eye-popping $100 a dose – on a vaccine that seems to have cost somewhere between $0.95 and $4 to produce. One former official accused them of “war profiteering” while another complained, “It’s not even their vaccine.”
COVID-19 was not a one-off. Almost all medicines receive substantial public funding. Meanwhile, the folks we think create medicines – Big Pharma – actually invent very few new drugs. Rather, these corporations behave like hedge funds – buying up the monopoly rights to produce medicines which others have made. They then aggressively squeeze everything they can out of this intellectual property – even if it means the vast majority of humanity has no access to medicines.
Just look at the drug known as Humira, a treatment for diseases like Crohn’s and rheumatoid arthritis. The technology behind Humira was created at Cambridge University, and the drug itself was devised by a spin-off company. At some point in the 2000s, AbbVie effectively bought the company and the rights to Humira. They spent some money on the drug but, according to a US congressional committee, a large part of that money was “dedicated to extending the company’s market monopoly.” They then jacked up the price 470 percent from its launch price. In the US, Humira costs around $77,000 for a year’s supply. Even in Europe, the price means the drug, where available, is often rationed.
The distrust that this behaviour had bred is by no means restricted to Biden’s administration. Price-jacking on insulin in the US forces one in four US diabetics to ration their medication. To overcome the problem, California, Michigan and Maine have all started looking at public manufacturing, with California allocating $100m to make insulin through a public enterprise at close to cost price, available to all.
While Big Pharma is ripping off Americans, and breaking health systems across Europe, it’s also failing to provide the medicines people across the world most need. The search for goldmine drugs means research into diseases suffered by less wealthy people, in less wealthy countries, takes a back seat. So does research into potentially catastrophic epidemics or new-generation antibiotics. Even though antibiotic resistance is likely to lead to tens of millions of deaths a year in coming decades, it’s simply not profitable enough for corporations used to making eye-watering returns.
Biden’s recent action against Big Pharma is a sign that things may be beginning to change. But he’ll have to go much further if we’re to build a medicine model which realises the right to healthcare of everyone in the world. Across the world, governments need to back medical research and development, build public manufacturing infrastructure and ensure that the know-how produced is open knowledge, fostering sharing and cooperation. The medicines we need are too important to be treated as financial assets. It’s time for change.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.